Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 12, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Adhera Therapeutics, Inc. | |
Entity Central Index Key | 0000737207 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 10,869,530 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash | $ 2,692 | $ 3,918 |
Accounts receivable, net of allowance | 90 | 48 |
Inventory | 473 | 242 |
Prepaid expenses and other assets | 323 | 469 |
Total current assets | 3,578 | 4,677 |
Operating lease right of use asset | 157 | |
Furniture and fixtures, net of depreciation | 62 | 72 |
Intangible assets, net of amortization | 339 | 392 |
Total noncurrent assets | 558 | 464 |
Total assets | 4,136 | 5,141 |
Current liabilities | ||
Accounts payable | 876 | 270 |
Due to related party | 4 | 28 |
Accrued expenses | 1,135 | 852 |
Current portion of operating lease liability | 77 | |
Accrued dividends | 2,189 | 1,064 |
Notes Payable | 5,151 | 0 |
Total current liabilities | 9,432 | 2,214 |
Operating lease liability, net of current portion | 88 | |
Total liabilities | 9,520 | 2,214 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity (deficit) | ||
Common stock, $0.006 par value; 180,000,000 shares authorized, 10,869,530 and 10,761,684 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 65 | 65 |
Additional paid-in capital | 29,418 | 28,710 |
Accumulated deficit | (34,867) | (25,848) |
Total stockholders’ equity (deficit) | (5,384) | 2,927 |
Total liabilities and stockholders’ equity (deficit) | 4,136 | 5,141 |
Series C convertible preferred stock | ||
Stockholders’ equity (deficit) | ||
Preferred stock, $0.01 par value; 100,000 shares authorized | 0 | 0 |
Series D convertible preferred stock | ||
Stockholders’ equity (deficit) | ||
Preferred stock, $0.01 par value; 100,000 shares authorized | 0 | 0 |
Series E convertible preferred stock | ||
Stockholders’ equity (deficit) | ||
Preferred stock, $0.01 par value; 100,000 shares authorized | 0 | 0 |
Series F Convertible preferred stock | ||
Stockholders’ equity (deficit) | ||
Preferred stock, $0.01 par value; 100,000 shares authorized | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Common stock, par value (in dollar per share) | $ 0.006 | $ 0.006 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 10,869,530 | 10,761,684 |
Common stock, shares outstanding | 10,869,530 | 10,761,684 |
Series C convertible preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,200 | 1,200 |
Preferred stock, liquidation preference value | $ 5,100 | $ 5,100 |
Preferred stock, shares issued | 100 | 100 |
Preferred stock, shares outstanding | 100 | 100 |
Series D convertible preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 220 | 220 |
Preferred stock, liquidation preference value | $ 300 | $ 300 |
Preferred stock, shares issued | 40 | 40 |
Preferred stock, shares outstanding | 40 | 40 |
Series E convertible preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 3,500 | 3,500 |
Preferred stock, liquidation preference value | $ 5,000 | $ 5,000 |
Preferred stock, shares issued | 3,478 | 3,488 |
Preferred stock, shares outstanding | 3,478 | 3,488 |
Series F Convertible preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,200 | 2,200 |
Preferred stock, liquidation preference value | $ 5,000 | $ 5,000 |
Preferred stock, shares issued | 381 | 381 |
Preferred stock, shares outstanding | 381 | 381 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 51,000 | $ 135,000 | $ 120,000 | $ 135,000 |
Cost of sales | 106,000 | 67,000 | 304,000 | 67,000 |
Gross margin | (55,000) | 68,000 | (184,000) | 68,000 |
Operating expenses | ||||
Sales and marketing | 1,311,000 | 871,000 | 3,518,000 | 3,457,000 |
Research and development | 0 | 0 | 0 | 173,000 |
General and administrative | 840,000 | 2,141,000 | 3,806,000 | 4,120,000 |
Goodwill and intangible asset impairment | 0 | 4,794,000 | 0 | 4,794,000 |
Amortization | 18,000 | 41,000 | 53,000 | 288,000 |
Total operating expenses | 2,169,000 | 7,847,000 | 7,377,000 | 12,832,000 |
Loss from operations | (2,224,000) | (7,779,000) | (7,561,000) | (12,764,000) |
Other expense | ||||
Interest expense | (332,000) | 0 | (333,000) | (149,000) |
Loss on settlement | 0 | 0 | 0 | (875,000) |
Loss before provision for income taxes | (2,556,000) | (7,779,000) | (7,894,000) | (13,788,000) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net loss | (2,556,000) | (7,779,000) | (7,894,000) | (13,788,000) |
Preferred Stock Dividends | (389,000) | (379,000) | (1,128,000) | (650,000) |
Net Loss allocable to common stock holders | $ (2,945,000) | $ (8,158,000) | $ (9,022,000) | $ (14,438,000) |
Net loss per share – Common Shareholders - basic and diluted (in dollars per share) | $ (0.27) | $ (0.73) | $ (0.83) | $ (1.33) |
Weighted average shares outstanding - basic and diluted (in dollars per share) | 10,869,530 | 11,241,684 | 10,830,816 | 10,864,036 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital Warrants | Accumulated Deficit | Series E Preferred Stock | Series E Preferred StockPreferred Stock | Series E Preferred StockAdditional Paid-in Capital | Series F Preferred Stock | Series F Preferred StockPreferred Stock | Series F Preferred StockAdditional Paid-in Capital | Series F Preferred StockAdditional Paid-in Capital Warrants |
Balance at Dec. 31, 2017 | $ 448 | $ 63 | $ 8,414 | $ (8,029) | ||||||||
Balance, shares at Dec. 31, 2017 | 10,521,278 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Share based compensation | (119) | (119) | ||||||||||
Net loss | (1,361) | (1,361) | ||||||||||
Balance at Mar. 31, 2018 | (794) | $ 63 | 8,533 | (9,390) | ||||||||
Balance, shares at Mar. 31, 2018 | 10,521,278 | 0 | ||||||||||
Balance at Dec. 31, 2017 | 448 | $ 63 | 8,414 | (8,029) | ||||||||
Balance, shares at Dec. 31, 2017 | 10,521,278 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net loss | (13,788) | |||||||||||
Balance at Sep. 30, 2018 | 6,114 | $ 67 | (5,401) | $ 33,915 | (22,467) | |||||||
Balance, shares at Sep. 30, 2018 | 11,241,684 | 3,490 | 308 | |||||||||
Balance at Mar. 31, 2018 | (794) | $ 63 | 8,533 | (9,390) | ||||||||
Balance, shares at Mar. 31, 2018 | 10,521,278 | 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of Preferred Stock, net of fees | $ 12,258 | $ 12,258 | ||||||||||
Issuance of Preferred Stock, net of fees, shares | 2,812 | |||||||||||
Warrants issued with Series E Preferred Stock | 31,107 | (31,107) | ||||||||||
Issuance of Series E Preferred for debt and accounts payable | 3,438 | 3,438 | ||||||||||
Issuance of Series E Preferred for debt and accounts payable, shares | 687 | |||||||||||
Conversion of Series C Preferred stock for common stock | $ 3 | (3) | ||||||||||
Conversion of Series C Preferred stock for common stock, shares | 433,334 | |||||||||||
Conversion of Series D Preferred stock for common stock, shares | 25,000 | |||||||||||
Warrants issued for settlement of liability | 1,494 | 1,494 | ||||||||||
Shares issued for settlement of litigation | 250 | $ 1 | 249 | |||||||||
Shares issued for settlement of litigation, shares | 210,084 | |||||||||||
Shares issued for License Agreement | 75 | 75 | ||||||||||
Shares issued for License Agreement, shares | 51,988 | |||||||||||
Accrued dividend | (271) | 0 | (271) | |||||||||
Share based compensation | (374) | (374) | ||||||||||
Cancellation of Series E Preferred Stock | (46) | (46) | ||||||||||
Cancellation of Series E Preferred Stock, shares | (9) | |||||||||||
Net loss | (4,648) | (4,648) | ||||||||||
Balance at Jun. 30, 2018 | 12,130 | $ 67 | (6,229) | 32,601 | (14,309) | |||||||
Balance, shares at Jun. 30, 2018 | 11,241,684 | 3,490 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of Preferred Stock, net of fees | $ (11) | $ (11) | $ 1,339 | $ 1,339 | ||||||||
Issuance of Preferred Stock, net of fees, shares | 308 | |||||||||||
Warrants issued for settlement of liability | $ (1,314) | $ 1,314 | ||||||||||
Accrued dividend | (379) | (379) | ||||||||||
Share based compensation | (814) | (814) | ||||||||||
Net loss | (7,779) | (7,779) | ||||||||||
Balance at Sep. 30, 2018 | 6,114 | $ 67 | (5,401) | 33,915 | (22,467) | |||||||
Balance, shares at Sep. 30, 2018 | 11,241,684 | 3,490 | 308 | |||||||||
Balance at Dec. 31, 2018 | 2,927 | $ 65 | (5,384) | 34,094 | (25,848) | |||||||
Balance, shares at Dec. 31, 2018 | 10,761,684 | 3,488 | 381 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Accrued dividend | (382) | (382) | ||||||||||
Share based compensation | (395) | (395) | ||||||||||
Net loss | (2,558) | (2,558) | ||||||||||
Balance at Mar. 31, 2019 | 382 | $ 65 | (4,989) | 34,094 | (28,788) | |||||||
Balance, shares at Mar. 31, 2019 | 10,761,684 | 3,488 | 381 | |||||||||
Balance at Dec. 31, 2018 | 2,927 | $ 65 | (5,384) | 34,094 | (25,848) | |||||||
Balance, shares at Dec. 31, 2018 | 10,761,684 | 3,488 | 381 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net loss | (7,894) | |||||||||||
Balance at Sep. 30, 2019 | (5,384) | $ 65 | (4,676) | 34,094 | (34,867) | |||||||
Balance, shares at Sep. 30, 2019 | 10,869,530 | 3,478 | 381 | |||||||||
Balance at Mar. 31, 2019 | 382 | $ 65 | (4,989) | 34,094 | (28,788) | |||||||
Balance, shares at Mar. 31, 2019 | 10,761,684 | 3,488 | 381 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Accrued dividend | (357) | (357) | ||||||||||
Share based compensation | (241) | (241) | ||||||||||
Conversion of Series E Preferred stock for common stock | 3 | 3 | ||||||||||
Conversion of Series E Preferred stock for common stock, shares | 107,846 | (10) | ||||||||||
Net loss | (2,780) | (2,780) | ||||||||||
Balance at Jun. 30, 2019 | (2,511) | $ 65 | (4,748) | 34,094 | (31,922) | |||||||
Balance, shares at Jun. 30, 2019 | 10,869,530 | 3,478 | 381 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Accrued dividend | (389) | (389) | ||||||||||
Share based compensation | (72) | (72) | ||||||||||
Net loss | (2,556) | |||||||||||
Balance at Sep. 30, 2019 | $ (5,384) | $ 65 | $ (4,676) | $ 34,094 | $ (34,867) | |||||||
Balance, shares at Sep. 30, 2019 | 10,869,530 | 3,478 | 381 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows Used in Operating Activities: | ||
Net loss | $ (7,894,000) | $ (13,788,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share based compensation | 708,000 | 1,307,000 |
Common shares issued for settlement | 0 | 250,000 |
Preferred shares issued for note settlement | 0 | 375,000 |
Common shares issued for license agreement | 0 | 75,000 |
Goodwill and intangible asset impairment | 0 | 4,794,000 |
Amortization of intangibles | 53,000 | 288,000 |
Bad debt expense | (14,000) | 0 |
Amortization of debt discount | 0 | 113,000 |
Depreciation | 10,000 | 0 |
Non-cash interest expense | 152,000 | 37,000 |
Non-cash lease expense | 83,000 | 0 |
Amortization of debt issuance cost | 181,000 | 0 |
Loss on settlement | 0 | 875,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (28,000) | (135,000) |
Inventory | (231,000) | (204,000) |
Prepaid expenses and other assets | 146,000 | (430,000) |
Accounts payable | 605,000 | (123,000) |
Accrued expenses | 142,000 | (641,000) |
Accrued fee payable | 0 | (320,000) |
Deferred revenue | 0 | 200,000 |
Due to related party | (24,000) | 313,000 |
Lease liability | (85,000) | 0 |
Net Cash Used in Operating Activities | (6,196,000) | (7,014,000) |
Cash Flows Used in Investing Activities: | ||
Purchase of furniture and fixtures | 0 | (28,000) |
Net Cash Used in Investing Activities | 0 | (28,000) |
Cash Flows Provided By Financing Activities: | ||
Proceeds from sale of preferred stock, net offering expenses | 0 | 13,586,000 |
Proceeds from loan payable | 5,677,000 | 0 |
Loan payable issuance costs | (707,000) | 0 |
Payments for notes payable | 0 | (144,000) |
Net Cash Provided by Financing Activities | 4,970,000 | 13,442,000 |
Net (decrease) increase in cash | (1,226,000) | 6,400,000 |
Cash - Beginning of Period | 3,918,000 | 106,000 |
Cash - End of Period | 2,692,000 | 6,506,000 |
Non-cash Investing and Financing Activities: | ||
Capitalization of operating lease right of use asset | 240,000 | 0 |
Issuance of warrants for liabilities, related party | 0 | 1,494,000 |
Preferred share settlement of debt and accrued liabilities | 0 | 3,438,000 |
Issuance of warrants | 0 | 32,421,000 |
Accrued dividends | 1,128,000 | 650,000 |
Conversion of Series E Preferred stock for common stock | 3,000 | 46,000 |
Goodwill reclassified to inventory | $ 0 | $ 161,000 |
Nature of Operations, Basis of
Nature of Operations, Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Nature of Operations, Basis of Presentation and Significant Accounting Policies | Nature of Operations, Basis of Presentation and Significant Accounting Policies Business Overview Adhera Therapeutics, Inc. (formerly known as Marina Biotech, Inc.) and its wholly-owned subsidiaries, MDRNA Research, Inc. (“MDRNA”), Cequent Pharmaceuticals, Inc. (“Cequent”), Atossa Healthcare, Inc. (“Atossa”), and IThenaPharma, Inc. (“IThena”) (collectively “Adhera,” the “Company,) is an emerging specialty pharmaceutical company that leverages innovative distribution models and technologies to improve the quality of care for patients in the United States suffering from chronic diseases. The Company is focused on fixed dose combination (“FDC”) therapies in hypertension, with plans to expand the portfolio of drugs being commercialized to include other therapeutic areas. The Company’s mission is to provide effective and patient centric treatment for hypertension while actively seeking additional assets that can be commercialized through our proprietary Total Care System (“TCS”). At the core of the Company's TCS system is DyrctAxess, a patented technology platform. DyrctAxess is designed to offer enhanced efficiency, control and access to the information necessary to empower patients, physicians and manufacturers to achieve optimal care. The Company is focused on demonstrating the therapeutic and commercial value of TCS through the commercialization of Prestalia ® , a single-pill FDC of perindopril arginine (“perindopril”) and amlodipine besylate (“amlodipine”) which is used as a first-line treatment for hypertension. Prestalia ® was developed by Les Laboratories, Servier, a French pharmaceutical conglomerate, that sells the formulation outside the United States under the brand names Coveram ® and/or Viacoram ® . Prestalia ® was approved by the U.S. Food and Drug Administration (“FDA”) in January 2015 and the license to such product was acquired by the Company from Symplmed in June 2017. By combining Prestalia ® , DyrctAxess and an independent pharmacy network, the Company has created a proprietary system for drug adherence including patient counseling and prescription reminder services, including the distribution of blood pressure monitors for therapeutic drug monitoring (“TDM”). In 2018, the Company discontinued all significant clinical development activities and is evaluating disposition options for its development assets, including but not limited to: (i) a next generation celecoxib program of drug candidates for the treatment of acute and chronic pain; (ii) an FDC used to suppress polyps in the precancerous syndrome and orphan indication Familial Adenomatous Polyposis; (iii) an FDC to treat Colorectal Cancer; and (iv) an FDC for irritable bowel disease (IBD). The Company plans to license or divest these development assets since they no longer align with the Company’s focus on the commercialization of Prestalia and other products. On September 4, 2019, the Company entered into a Co-Promotion Agreement with Allegis Pharmaceuticals, LLC (“Allegis”) to co-promote Allegis’ FDA approved product Nitrolingual ® Pumpspray indicated for acute relief of an attack or prophylaxis of angina pectoris due to coronary artery disease. The Co-Promotion Agreement relates to both the branded and the authorized generic versions of the product. B asis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete audited financial statements. This quarterly report should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . The information furnished in this report reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for each period presented. The results of operations for the three or nine months ended September 30, 2019 are not necessarily indicative of the results for the year ending December 31, 2019 or for any future period. Principles of Consolidation The condensed consolidated financial statements include the accounts of Adhera Therapeutics, Inc. and the wholly-owned subsidiaries, Ithena, Cequent, MDRNA, and Atossa, and eliminate any inter-company balances and transactions. Going Concern and Management’s Liquidity Plans The accompanying condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. As of September 30, 2019 , the Company had cash and cash equivalents of $2.7 million and has negative working capital of approximately $5.9 million . The Company has incurred recurring losses and negative cash flows from operations since inception and has funded its operating losses through the sale of common stock, preferred stock, warrants to purchase common stock, convertible notes and secured promissory notes. The Company incurred a net operating loss of approximately $2.6 million and $7.9 million for the three and nine months ended September 30, 2019 , respectively. The Company had an accumulated deficit of approximately $34.9 million as of September 30, 2019 . The Company expects to continue to incur operating losses as it executes the commercialization plans for Prestalia ® , as well as other strategic and business development initiatives. If the Company is unable to obtain additional financing in the future, there may be a negative impact on the financial viability of the Company. The Company plans to increase working capital by managing its cash flows and expenses, divesting development assets and raising additional capital through private or public equity or debt financing. There can be no assurance that such financing or partnerships will be available on terms which are favorable to the Company or at all. While management of the Company believes that it has a plan to fund ongoing operations, there is no assurance that its plan will be successfully implemented. Failure to raise additional capital through one or more financings, divesting development assets or reducing discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements do not contain any adjustments that might result from the resolution of any of the above uncertainties. Summary of Significant Accounting Policies Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Significant areas requiring the use of management estimates include revenue and related discounts and allowances and accruals related to our operating activity including legal and other consulting expenses. Actual results could differ materially from such estimates under different assumptions or circumstances. Compensating Balance Arrangements The Company maintains a $50,000 short-term certificate of deposit as a compensating balance for the Company’s credit card. The certificate of deposit is classified as cash and cash equivalents in the accompanying balance sheet. Reclassification Certain reclassifications have been made to prior years' consolidated statements of operations to conform to current period presentation. These reclassifications had no effect on prior years' consolidated net loss or stockholders' deficit. Fair Value of Financial Instruments The Company considers the fair value of cash, accounts payable, accounts receivable and accrued expenses not to be materially different from their carrying value. These financial instruments have short-term maturities. We follow authoritative guidance with respect to fair value reporting issued by the Financial Accounting Standards Board (“FASB”) for financial assets and liabilities, which defines fair value, provides guidance for measuring fair value and requires certain disclosures. The guidance does not apply to measurements related to share-based payments. The guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. There were no liabilities or assets measured at fair value as of September 30, 2019 or December 31, 2018 . Accounts Receivable, net Accounts receivable consists of amounts due from wholesale distributors and specialty pharmacy providers. The Company records an allowance for doubtful accounts at the time potential collection risk is identified. The Company estimates its allowance based on historical experience, assessment of specific risks and discussions with individual customers. The Company believes the reserve is adequate to mitigate current collection risks. During the three and nine months ended September 30, 2019 , the Company recorded a reduction in the allowance of approximately $55,000 and $14,000 , respectively. The Company recorded no allowance for the three or nine months ended September 30, 2018. Goodwill and Intangible Assets The Company periodically reviews the carrying value of intangible assets, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses level 3 inputs and a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. For the three and nine months ended September 30, 2018, the Company recognized a loss on impairment of an intangible asset including goodwill of approximately $4.8 million . The impairment determination was primarily a result of the decision to divest assets that no longer aligned with the Company’s strategic objectives. No impairment charges were recognized for the three and nine -month period ended September 30, 2019 . Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment indicators throughout the year and performs detailed testing whenever impairment indicators are present. In addition, we perform detailed impairment testing for indefinite-lived intangible assets, at least annually, at December 31. When necessary, the Company records charges for impairments. Specifically: • For finite-lived intangible assets, such as developed technology rights, and for other long-lived assets, we compare the undiscounted amount of the projected cash flows associated with the asset, or asset group, to the carrying amount. If the carrying amount is found to be greater, we record an impairment loss for the excess of book value over fair value. In addition, in all cases of an impairment review, we re-evaluate the remaining useful lives of the assets and modify them, as appropriate; and • For indefinite-lived intangible assets, such as acquired in-process R&D assets, each year and whenever impairment indicators are present, we determine the fair value of the asset and record an impairment loss for the excess of book value over fair value, if any. The Company did not recognize any loss on impairment for the three or nine -month periods ended September 30, 2019 or 2018 . Revenue Recognition Customers Concentration The Company operates in one segment and sells its prescription drug (Prestalia ® ) directly to specialty contracted retail pharmacies and indirectly through wholesalers. For the three months ended September 30, 2019 , the Company’s three largest customers accounted for 22% , 20% and 13% of the Company’s total gross sales. For the nine months ended September 30, 2019 , the Company’s three largest customers accounted for 30% , 28% , and 18% of the Company’s total gross sales. The Company works with a third-party pharmacy network manager to attract, retain, and manage the Company’s pharmacy customers and distribution channels. For the three and nine months months ended September 30, 2018, the Company’s three largest customers accounted for 42% , 36% and 12% of the Company’s total gross sales. Revenue, Net The Company adopted the new revenue recognition guidelines in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606), effective with the quarter ended March 31, 2018. The Company sells its medicines primarily to wholesale distributors and specialty pharmacy providers under agreements with payment terms typically less than 90 days. These customers subsequently resell the Company’s medicines to health care patients. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority of the Company’s contracts have a single performance obligation to transfer medicines. Accordingly, revenues from medicine sales are recognized when the customer obtains control of the Company’s medicines, which occurs at a point in time, typically upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring medicines and is generally based upon a list or fixed price less allowances for medicine returns, rebates and discounts. Company records an estimate of unrealized revenue reductions, and the related liability, for bottles sold to pharmacies but not yet prescribed. Medicine Sales Discounts and Allowances The nature of the Company’s contracts gives rise to variable consideration because of allowances for medicine returns, rebates and discounts. Allowances for medicine returns, rebates and discounts are recorded at the time of sale to wholesale pharmaceutical distributors and pharmacies. The Company applies significant judgments and estimates in determining some of these allowances. If actual results differ from its estimates, the Company will be required to make adjustments to these allowances in the future. The Company’s adjustments to gross sales are discussed further below. Patient Access Programs The Company offers discounts to patients under which the patient receives a discount on his or her prescription. In circumstances when a patient’s prescription is rejected by a third-party payer, the Company will pay for the full cost of the prescription. The Company reimburses pharmacies for this discount directly or through third-party vendors. The Company reduces gross sales by the amount of actual co-pay and other patient assistance in the period based on the invoices received. The Company also records an accrual to reduce gross sales for estimated co-pay and other patient assistance on units sold to distributors or pharmacies that have not yet been prescribed/dispensed to a patient. The Company calculates accrued co-pay and other patient assistance fee estimates using the expected value method. The estimate is based on contract prices, estimated percentages of medicine that will be prescribed to qualified patients, average assistance paid based on reporting from the third-party vendors and estimated levels of inventory in the distribution channel. Accrued co-pay and other patient assistance fees are included in “accrued expenses” on the condensed consolidated balance sheet. Patient assistance programs include both co-pay assistance and fully bought down prescriptions. Sales Returns Consistent with industry practice, the Company maintains a return policy that allows customers to return medicines within a specified period prior to and subsequent to the medicine expiration date. Generally, medicines may be returned for a period beginning six months prior to its expiration date and up to one year after its expiration date. The right of return expires on the earlier of one year after the medicine expiration date or the time that the medicine is dispensed to the patient. The majority of medicine returns result from medicine dating, which falls within the range set by the Company’s policy and are settled through the issuance of a credit to the customer. The Company calculates sales returns using the expected value method. The estimate of the provision for returns is based upon industry experience. This period is known to the Company based on the shelf life of medicines at the time of shipment. The Company records sales returns in “accrued expenses” and as a reduction of revenue. Cost of Goods Sold Distribution Service Fees The Company includes distribution service fees paid for inventory management services as cost of goods sold. The Company calculates accrued distribution service fee estimates using the most likely amount method. The Company accrues estimated distribution fees based on contractually determined amounts. Accrued distribution service fees are included in “accrued expenses” on the condensed consolidated balance sheet. Shipping Fees The Company includes fees incurred by pharmacies for shipping medicines to patients as cost of goods sold. The Company calculates accrued shipping fee estimates using the expected value method. The Company records accrued shipping fees in “accrued expenses” on the condensed consolidated balance sheet. Non-Commercial Product The Company records the cost of non-commercial product distributed to patients as a cost of goods sold. Royalties on Product Sales The Company records royalty fees on the sale of commercial product as a cost of goods sold. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) (“ASU No. 2016-2”). Under ASU No. 2016-2, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. For leases with a term of twelve months or less, the lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities by class of underlying assets. ASU No. 2016-2 became effective for the Company beginning in the first quarter of 2019. The Company adopted this standard on January 1, 2019, using a modified retrospective approach at the adoption date through a cumulative-effect adjustment to retained earnings. The adoption did not have a material impact on its condensed consolidated statement of operations. The Company elected to not recognize lease assets and liabilities for leases with an initial term of twelve months or less. Net Income (Loss) per Common Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and common stock equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. Potentially dilutive securities which include outstanding warrants, stock options and preferred stock have been excluded from the computation of diluted net loss per share as their effect would be anti-dilutive. For all periods presented, basic and diluted net loss were the same. The following table presents the computation of net loss per share (in thousands, except share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator Net loss $ (2,556 ) $ (7,779 ) $ (7,894 ) $ (13,788 ) Preferred stock dividends (389 ) (379 ) (1,128 ) (650 ) Net Loss allocable to common stock holders $ (2,945 ) $ (8,158 ) $ (9,022 ) $ (14,438 ) Denominator Weighted average common shares outstanding used to compute net loss per share, basic and diluted 10,869,530 11,241,684 10,830,816 10,864,036 Net loss per share of common stock, basic and diluted Net loss per share $ (0.27 ) $ (0.73 ) $ (0.83 ) $ (1.33 ) Potentially dilutive securities not included in the calculation of diluted net loss per common share because to do so would be anti-dilutive are as follows: For the Three and Nine Months ended September 30, 2019 2018 Stock options outstanding 4,820,407 5,380,957 Warrants 35,667,329 35,646,829 Series C Preferred Stock 68,000 68,000 Series D Preferred Stock 3,000 3,000 Series E Preferred Stock 34,780,000 34,990,000 Series F Preferred Stock 3,810,000 3,080,000 Total 79,148,736 79,168,786 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consists of raw material, work-in-process and finished goods stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis. The Company reviews the composition of inventory at each reporting period in order to identify obsolete, slow-moving, quantities in excess of expected demand, or otherwise non-salable items. Inventory as of September 30, 2019 and December 31, 2018 are as follows: September 30, 2019 December 31, 2018 (in thousands) Work-in-Process $ 223 $ — Raw Materials 73 147 Finished Goods 177 95 Inventory, Net $ 473 $ 242 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible Asset Summary Intangible assets as of September 30, 2019 are as follows: Net Book Value Remaining Estimated Useful Life (Years) Annual Amortization Expense (in thousands) Intangible asset - Prestalia $ 276 4.25 $ 65 Intangible asset - DyrctAxess 63 11.84 5 Total $ 339 $ 70 Amortization expense for the three months ended September 30, 2019 and September 30, 2018 was approximately $18,000 and $41,000 , respectively. Amortization expense for the nine months ended September 30, 2019 and September 30, 2018 was approximately $53,000 and $288,000 , respectively. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable On June 28, July 3, July 17, and August 5, 2019 the Company entered into term loan subscription agreements with certain accredited investors, pursuant to which the Company issued secured promissory notes (the “Notes”) in the aggregate principal amount of approximately $5.7 million . The Company paid $707,000 in debt issuance costs which was recorded as a debt discount to be amortized as interest expense over the term of the loan using the effective interest rate method. The Notes accrue interest at a rate of 12.0% per annum. Interest is payable quarterly with the first interest payment to be made on December 28, 2019, and each subsequent payment every three months thereafter. The unpaid principal balance of the Notes, plus accrued and unpaid interest thereon, will mature on the earliest to occur of: (i) June 28, 2020 (subject to extension for up to sixty ( 60 ) days based upon the mutual agreement of the Company and the holders of a majority of the unpaid principal balance of all outstanding Notes) or (ii) at any time following an Event of Default. The Notes may not be prepaid without the prior written consent of the holders of the Notes. The Notes are secured by a first lien and security interest on all the assets of the Company and certain of its wholly owned subsidiaries. The Company recognized approximately and $147,000 and $148,000 in interest expense related to Notes for the three and nine months ended September 30, 2019 , respectively. |
Licensing Agreements (Notes)
Licensing Agreements (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
Licensing Agreement [Abstract] | |
Licensing Agreements | Licensing Agreements Les Laboratories Servier As a result of the Asset Purchase Agreement that the Company entered into with Symplmed Pharmaceuticals LLC in June 2017, Symplmed assigned to the Company an Amended and Restated License and Commercialization Agreement with Les Laboratories Servier, pursuant to which the Company has the exclusive right to manufacture, have manufactured, develop, promote, market, distribute and sell Prestalia ® in the U.S. (and its territories and possessions). The terms of the agreement include single-digit royalty payments based on net sales and milestone payments based upon the attainment of sales thresholds. The agreement includes a termination clause pursuant to which Servier has the right to terminate the agreement in various circumstances, including, without limitation, as a result of the failure by the Company to achieve certain sales thresholds by the dates set forth in the agreement. For the three month and nine month periods ended September 30, 2019 the Company paid $8,000 and $27,000 , respectively, for royalties under the license agreement with Les Laboratories -Servier. No royalties were paid for the three or nine month periods ended September 30, 2018. Biofarma As consideration for the Prestalia Trademark license which the Company assumed in connection with the Asset Purchase Agreement with Symplmed, the Company pays low single digit royalties to Biofarma, an affiliate of Servier and the holder of the Prestalia trademark. For the three month and nine month periods ended September 30, 2019 the Company paid $1,000 and $3,000 , respectively, to Biofarma. No royalties were paid for the three or nine month period ended September 30, 2018. License of DiLA 2 Assets On March 16, 2018, the Company entered into an exclusive sublicensing agreement for certain intellectual property rights to its DiLA 2 delivery system. The agreement included an upfront payment of $200,000 and future additional consideration for sales and development milestones. The upfront fee was contingent upon the Company obtaining a third-party consent to the agreement within ninety days of execution. As of September 30, 2019 and December 31, 2018 , the Company had not obtained consent for the sublicense and has classified the upfront payment as an accrued liability on its balance sheet. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Due to Related Party The Company and other related entities have had a commonality of ownership and/or management control, and as a result, the reported operating results and/or financial position of the Company could significantly differ from what would have been obtained if such entities were autonomous. The Company had a Master Services Agreement (“MSA”) with Autotelic Inc., a related party that is partly owned by one of the Company’s former Board members and executive officers, namely Vuong Trieu, Ph.D., effective November 15, 2016. The MSA stated that Autotelic Inc. will provide business functions and services to the Company and allowed Autotelic Inc. to charge the Company for these expenses paid on its behalf. The MSA included personnel costs allocated based on amount of time incurred and other services such as consultant fees, clinical studies, conferences and other operating expenses incurred on behalf of the Company. The MSA required a 90-day written termination notice in the event either party requires to terminate such services. We and Autotelic Inc. agreed to terminate the MSA effective October 31, 2018. Dr. Trieu resigned as a director of our company effective October 1, 2018. During the period commencing November 15, 2016 (the “Effective Date”) and ending on the date that the Company had completed an equity offering of either common or preferred stock in which the gross proceeds therefrom is no less than $10.0 million (the “Equity Financing Date”), the Company paid Autotelic the following compensation: cash in an amount equal to the actual labor cost (paid on a monthly basis), plus 100% markup in warrants for shares of the Company’s common stock with a strike price equal to the fair market value of the Company’s common stock at the time said warrants were issued. The Company also paid Autotelic for the services provided by third party contractors plus 20% mark up. The warrant price per share was calculated based on the Black-Scholes model. After the Equity Financing Date, the Company paid Autotelic Inc. a cash amount equal to the actual labor cost plus 100% mark up of provided services and 20% mark up of provided services by third party contractors or material used in connection with the performance of the contracts, including but not limited to clinical trial, non-clinical trial, Contract Manufacturing Organizations, FDA regulatory process, Contract Research Organizations and Chemistry and Manufacturing Controls. In accordance with the MSA, Autotelic Inc. billed the Company for personnel and service expenses Autotelic Inc. incurred on behalf of the Company. For the nine months ended and September 30, 2018 , Autotelic Inc. billed a total of approximately $778,000 , including personnel costs of $371,000 . No costs were billed for the period ended September 30, 2019. An unpaid balance of approximately $4,000 is included in due to related party in the accompanying balance sheets for both periods ending September 30, 2019 and December 31, 2018 . In April 2018, and in connection with the closing of our private placement on that date, we entered into a Compromise and Settlement Agreement with Autotelic Inc. pursuant to which we agreed to issue to Autotelic Inc. an aggregate of 162.59 shares of Series E Preferred Stock to settle accounts payable of $813,000 and Warrants to purchase up to 1,345,040 shares of common stock to satisfy accrued and unpaid fees in the aggregate amount of approximately $740,000 , and other liabilities, owed to Autotelic Inc. as of March 31, 2018 pursuant to the MSA. The warrants have a five -year term, an initial exercise price of $0.55 , and have a fair value of approximately $1.5 million resulting in a loss on settlement of debt of approximately $750,000 . Transactions with BioMauris, LLC/Erik Emerson Until February of 2019, the Company had engaged the services of BioMauris, LLC, of which Erik Emerson, our former Chief Commercial Officer and a current director of Adhera, is Executive Chairman. During the nine months ended September 30, 2019 and 2018 , the Company recorded approximately $32,000 and $496,000 , respectively, for related party expenses incurred under the agreement. As of December 31, 2018 , the Company recorded approximately, $24,000 as a related party liability on the accompanying balance sheet for amounts due BioMauris, LLC. No related party liability was recorded as of September 30, 2019 . Beginning in the second quarter of 2019 when components of the financial transaction took place and fully effective in July 2019, Mr. Emerson, a member our Board of Directors and our former Chief Commercial Officer, became the owner of an equity interest of approximately 22% in Pharma Hub Network, our third-party network manager. During the third quarter of 2019, the Company terminated the relationship with Pharma Hub Network. For the three and nine months ended September 30, 2019 , the Company recorded approximately $25,000 and $62,000 , respectively, of related party expense for services provided by Pharma Hub Network. No related party liability was recorded as of September 30, 2019 or December 31, 2018. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Series E Convertible Preferred Stock Private Placement In April and May 2018, the Company entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 2,812 shares of our Series E Preferred, at a purchase price of $5,000 per share of Series E Preferred. Each share of Series E Preferred is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5 year warrant to purchase 0.75 shares of common stock for each share of common stock issuable upon the conversion of the Series E Preferred purchased by such investor at an initial exercise price equal to $0.55 per share of common stock, subject to adjustment thereunder. In July of 2018, the conversion price of the warrants was adjusted down to $0.50 upon issuance of the Series F Convertible Preferred Stock. Series E Preferred accrues 8% dividends per annum which are payable in cash or stock at the Company’s discretion. The Series E Preferred has voting rights, dividend rights, liquidation preferences, conversion rights and anti-dilution rights as described in the Certificate of Designation of Preferences, Rights and Limitations of the Preferred Stock, which we filed with the Secretary of State of Delaware in April 2018. The Warrants have full-ratchet anti-dilution protection, are exercisable for a period of five years and contain customary exercise limitations. We received net proceeds of approximately $12.2 million from the sale of the Series E Preferred, after deducting placement agent fees and estimated expenses payable by us of approximately $2.0 million associated with such closing. In connection with the private placement described above, we also issued to the placement agent for such private placement a Warrant to purchase 2,958,460 shares of our common stock. In October 2018, an investor converted 2 shares of Series E Preferred into 20,000 shares of our common stock. In April 2019, the Company issued 107,846 unregistered shares of our common stock to a holder of our Series E Convertible Preferred Stock in connection with the conversion of $53,923 of “Stated Value” of our Series E Convertible Preferred Stock. As of September 30, 2019 , the Company had recorded accrued dividends of approximately $2.0 million on Series E Preferred Stock. Series F Convertible Preferred Stock Private Placement In July 2018, the Company entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 308 shares of our Series F Preferred, at a purchase price of $5,000 per share of Series F Preferred. Each share of Series F Preferred is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5 year warrant (the “Warrants”, and collectively with the Preferred Stock, the “Securities”) to purchase 0.75 shares of common stock for each share of common stock issuable upon the conversion of the Series F Preferred purchased by such investor at an initial exercise price equal to $0.55 per share of common stock, subject to adjustment thereunder. The Series F Preferred accrues 8% dividends per annum which are payable in cash or stock at the Company’s discretion. The Series F Preferred has voting rights, dividend rights, liquidation preferences, conversion rights and anti-dilution rights as described in the Certificate of Designation of Preferences, Rights and Limitations of the Preferred Stock, which we filed with the Secretary of State of Delaware in July 2018. The Warrants have full-ratchet anti-dilution protection, are exercisable for a period of five years and contain customary exercise limitations. The Company received proceeds of approximately $1.4 million from the sale of the Securities, after deducting placement agent fees and estimated expenses payable by us of approximately $180,000 associated with such closing. We used the proceeds of the offering for funding our commercial operations to the sale and promotion of our Prestalia product, working capital needs, capital expenditures, the repayment of certain liabilities and other general corporate purposes. In connection with the private placement described above, we also issued to the placement agent for such private placement a Warrant to purchase 308,000 shares of our common stock. The Warrant has a five -year term and an initial exercise price of $0.55 per share. On November 9, 2018, the Company entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 73 shares of our Series F Preferred Stock, at a purchase price of $5,000 per share of Preferred Stock. Each share of Series F Preferred is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5 year warrant to purchase 0.75 shares of common stock for each share of common stock issuable upon the conversion of the Series F Preferred purchased by such investor at an initial exercise price equal to $0.55 per share of common stock, subject to adjustment thereunder. We received total net proceeds of approximately $0.3 million from the issuance of the securities described above, after deducting placement agent fees and estimated expenses payable by us associated with such closing. In connection with the private placement described above, we also issued to the placement agent for such private placement a Warrant to purchase 73,000 shares of our common stock. The Warrant has a five -year term and an initial exercise price of $0.55 per share. As of September 30, 2019 , the Company had recorded accrued dividends of approximately $177,000 on Series F Preferred Stock. Warrants As of September 30, 2019 , there were 35,667,329 warrants outstanding, with a weighted average exercise price of $0.63 per share, and annual expirations as follows: Expiring in 2020 1,189,079 Expiring in 2021 343,750 Expiring in 2023 33,795,847 Expiring thereafter 338,653 Total 35,667,329 The above includes price adjustable warrants totaling 34,737,030 shares. A total of 600,000 warrants expired during the three and nine months ended September 30, 2019 . Tender Offer - May 2019 On May 28, 2019, the Company filed a Tender Offer Statement on Schedule TO. The Schedule TO related to the offer (the “Offer”) by the Company to all holders of the Company’s outstanding warrants that were issued to investors in connection with the Company’s private placement of its Series E Convertible Preferred Stock and Series F Convertible Preferred Stock during 2018, which warrants are exercisable for shares of the Company’s common stock at an exercise price of $0.50 per share (subject to adjustment) with respect to the warrants that were issued in connection with the Company’s private placement of its Series E Convertible Preferred Stock and $0.55 per share with respect to the warrants that were issued in connection with the Company’s private placement of its Series F Convertible Preferred Stock, to receive two (2) shares of common stock in exchange for every warrant tendered by the holders thereof. On June 6, 2019, the Company amended the Schedule TO to change the conversion terms on the issuance of warrant. On July 2, 2019, the Company announced the termination of the exchange offer. As a result of the termination of the Offer, no Warrants were accepted for exchange or exchanged pursuant to the Offer. Tender Offer - August 2019 On August 20, 2019, the Company filed a Tender Offer Statement on Schedule TO. The Schedule TO related to the offer by the Company to all holders of the Company’s outstanding shares of Series E Convertible Preferred Stock and Series F Convertible Preferred Stock to receive, in exchange for each share of preferred stock tendered by the holders thereof, such number of shares of common stock as is equal to the quotient obtained by dividing the “stated value” of such share of preferred stock by $0.50 . On September 26, 2019, the Company announced the termination of the Offer. As a result of the termination of the Offer, no shares of preferred stock were accepted for exchange or exchanged pursuant to the Offer. |
Stock Incentive Plans
Stock Incentive Plans | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Incentive Plans | Stock Incentive Plans Stock Options The following table summarizes stock option activity for the nine months ended September 30, 2019 . Options Outstanding Shares Weighted Average Exercise Price Outstanding, December 31, 2018 5,613,057 $ 0.83 Options granted 1,635,000 0.37 Options expired / forfeited (2,427,650 ) 0.64 Outstanding, September 30, 2019 4,820,407 0.71 Exercisable, September 30, 2019 2,986,333 $ 0.76 The following table summarizes additional information on stock options outstanding at September 30, 2019 . Options Outstanding Options Exercisable Range of Exercise Prices Number Outstanding Weighted- Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.28 - $1.00 4,312,000 8.59 $ 0.57 2,762,000 $ 0.66 $1.50 - $1.80 493,207 7.93 $ 1.79 209,133 $ 1.79 $2.60 - $6.35 15,200 0.77 $ 4.48 15,200 $ 4.48 Totals 4,820,407 8.50 $ 0.71 2,986,333 $ 0.76 Weighted-Average Exercisable Remaining Contractual Life (Years) 8.09 During the nine months ended September 30, 2019 , the Company granted an aggregate of 1,635,000 stock options to employees. No stock options were granted for the three month period ended September 30, 2019. Total expense related to stock options was approximately $72,000 and $814,000 for the three months ended September 30, 2019 and 2018 , respectively and approximately $708,000 and $1.3 million for the nine months ended September 30, 2019 and 2018 , respectively. As of September 30, 2019 , the Company had approximately $831,000 of total unrecognized compensation expense related to unvested stock options. As of September 30, 2019 , the intrinsic value of options outstanding was zero . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation Because of the nature of the Company’s business it is subject to claims and/or threatened legal actions, which arise out of the normal course of business. Other than the disclosure below, as of the date of this filing, the Company is not aware of any pending lawsuits against it, its officers or directors. Paragraph IV Challenge The Company’s Prestalia product was involved in a paragraph IV challenge regarding patents issued to perindopril arginine. This challenge, which was pending in the United States District Court for the District of Delaware (No. 1:17-cv-276), was captioned Apotex Inc. and Apotex Corp. v. Symplmed Pharmaceuticals, LLC and Les Laboratoires Servier . The challengers (Apotex Inc. and Apotex Corp. (“Apotex”)) filed an Abbreviated New Drug Application seeking FDA approval to market a generic version of Prestalia and included a Paragraph (IV) certification. In the litigation, Apotex sought a declaratory judgment that no valid claims of the two patents the Company listed in the FDA Orange Book as having claims covering Prestalia, U.S. Patent No. 6,696,481 and 7,846,961, will be infringed by the Apotex proposed generic version of Prestalia and that the claims of those patents are invalid. The challenge was designed to provide Apotex with an opportunity to enter the market with a generic version of Prestalia, ahead of the expiration of the patents with claims covering that product. Apotex entered into negotiations with Symplmed Pharmaceuticals, LLC (which entity sold its assets relating to Prestalia ® to us in June 2017, including its License and Commercialization Agreement with Les Laboratories Servier) and Les Laboratories Servier (which entity owns or controls intellectual property rights relating to Prestalia ® , which rights have been licensed to the Company to resolve the challenge in the second quarter of 2017. Such parties, along with us, have reached an agreement on terms that result in a delay to the challengers’ ability to enter the market with a generic version of Prestalia, while still providing the challenger with the right to enter the market prior to the expiration of the patent covering such product. Specifically, the parties have entered into a Confidential Settlement Agreement in connection with the settlement of the matter, pursuant to which, among other things, the parties entered into a Confidential License Agreement, whereby Symplmed, Servier and our company agreed to grant to Apotex a non-transferable, non-sublicensable, perpetual, irrevocable, royalty-free, non-exclusive license to the two patents listed in the FDA Orange Book as having claims covering Prestalia to make, use and market a generic version of Prestalia, or import a generic version of Prestalia from India into the United States, on or after January 1, 2021. As a result of the foregoing, the matter is now settled. Leases The Company entered into a Standard Form Office Lease with ROC III Fairlead Imperial Center, LLC, as landlord, pursuant to which we lease our corporate headquarters located at 4721 Emperor Boulevard, Suite 350, Durham, North Carolina 27703 for a term of 37 months starting on October 1, 2018. Our base monthly rent for such space is currently $6,458 , which amount will increase to $7,057 for the final month of the term. Other than the lease for our corporate headquarters, we do not own or lease any real property or facilities that are material to our current business operations. As we expand our business operations, we may seek to lease additional facilities of our own in order to support our operational and administrative needs under our current operating plan. The Company adopted ASU No. 2016-2 on January 1, 2019, using a modified retrospective approach at the adoption date through a cumulative-effect adjustment to retained earnings. The adoption did not have a material impact on its condensed consolidated statement of operations. However, the new standard required the Company to establish approximately $0.2 million of liabilities and corresponding right-of-use assets of approximately $0.2 million on its condensed consolidated balance sheet for operating leases on rented office properties that existed as of the January 1, 2019, adoption date. The total right-of-use asset was approximately $157,000 as of September 30, 2019 and is reflected in the operating lease right of use asset on the accompanying condensed consolidated balance sheet. The total related liability was approximately $165,000 as of September 30, 2019 , of which approximately $77,000 is included in current portion of operating lease liability and approximately $88,000 is reflected in operating lease liability, net of current portion on the accompanying condensed consolidated balance sheet. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Except for the events discussed below, there were no subsequent events that required recognition or disclosure. The Company evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission. On October 30, 2019, the Company repurchased 20 shares of Series F Convertible Preferred Stock including accrued and unpaid dividends and warrants to purchase 150,000 shares of common stock for $100,000 from our former CEO pursuant to an amendment to the settlement agreement dated April 4, 2019. The Company also committed to purchase from such officer the remaining Series F Convertible Preferred Stock and related warrants for $100,000 by not later than March 1, 2020. On November 1, 2019, the Company issued 350,000 stock options to an employee at exercise price of $.09 per share. The grant included both time and performance based vesting. On November 19, 2019, the Company entered into an Amendment No. 4 to the Amended and Restated License and Commercialization Agreement with Les Laboratories Servier, which modified the agreement to delay the date by which the Company would be required to meet certain net sales milestones as set forth in the agreement. As per the license and commercialization agreement, as amended, Les Laboratories Servier may terminate the agreement if net sales of Prestalia ® by the Company are below $1.0 million for two successive calendar quarters beginning after June 30, 2020. |
Nature of Operations, Basis o_2
Nature of Operations, Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Significant areas requiring the use of management estimates include revenue and related discounts and allowances and accruals related to our operating activity including legal and other consulting expenses. Actual results could differ materially from such estimates under different assumptions or circumstances. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company considers the fair value of cash, accounts payable, accounts receivable and accrued expenses not to be materially different from their carrying value. These financial instruments have short-term maturities. We follow authoritative guidance with respect to fair value reporting issued by the Financial Accounting Standards Board (“FASB”) for financial assets and liabilities, which defines fair value, provides guidance for measuring fair value and requires certain disclosures. The guidance does not apply to measurements related to share-based payments. The guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable consists of amounts due from wholesale distributors and specialty pharmacy providers. The Company records an allowance for doubtful accounts at the time potential collection risk is identified. The Company estimates its allowance based on historical experience, assessment of specific risks and discussions with individual customers. The Company believes the reserve is adequate to mitigate current collection risks. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company periodically reviews the carrying value of intangible assets, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses level 3 inputs and a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment indicators throughout the year and performs detailed testing whenever impairment indicators are present. In addition, we perform detailed impairment testing for indefinite-lived intangible assets, at least annually, at December 31. When necessary, the Company records charges for impairments. Specifically: • For finite-lived intangible assets, such as developed technology rights, and for other long-lived assets, we compare the undiscounted amount of the projected cash flows associated with the asset, or asset group, to the carrying amount. If the carrying amount is found to be greater, we record an impairment loss for the excess of book value over fair value. In addition, in all cases of an impairment review, we re-evaluate the remaining useful lives of the assets and modify them, as appropriate; and • For indefinite-lived intangible assets, such as acquired in-process R&D assets, each year and whenever impairment indicators are present, we determine the fair value of the asset and record an impairment loss for the excess of book value over fair value, if any. |
Revenue Recognition | Revenue Recognition Customers Concentration The Company operates in one segment and sells its prescription drug (Prestalia ® ) directly to specialty contracted retail pharmacies and indirectly through wholesalers. For the three months ended September 30, 2019 , the Company’s three largest customers accounted for 22% , 20% and 13% of the Company’s total gross sales. For the nine months ended September 30, 2019 , the Company’s three largest customers accounted for 30% , 28% , and 18% of the Company’s total gross sales. The Company works with a third-party pharmacy network manager to attract, retain, and manage the Company’s pharmacy customers and distribution channels. For the three and nine months months ended September 30, 2018, the Company’s three largest customers accounted for 42% , 36% and 12% of the Company’s total gross sales. Revenue, Net The Company adopted the new revenue recognition guidelines in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606), effective with the quarter ended March 31, 2018. The Company sells its medicines primarily to wholesale distributors and specialty pharmacy providers under agreements with payment terms typically less than 90 days. These customers subsequently resell the Company’s medicines to health care patients. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority of the Company’s contracts have a single performance obligation to transfer medicines. Accordingly, revenues from medicine sales are recognized when the customer obtains control of the Company’s medicines, which occurs at a point in time, typically upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring medicines and is generally based upon a list or fixed price less allowances for medicine returns, rebates and discounts. Company records an estimate of unrealized revenue reductions, and the related liability, for bottles sold to pharmacies but not yet prescribed. Medicine Sales Discounts and Allowances The nature of the Company’s contracts gives rise to variable consideration because of allowances for medicine returns, rebates and discounts. Allowances for medicine returns, rebates and discounts are recorded at the time of sale to wholesale pharmaceutical distributors and pharmacies. The Company applies significant judgments and estimates in determining some of these allowances. If actual results differ from its estimates, the Company will be required to make adjustments to these allowances in the future. The Company’s adjustments to gross sales are discussed further below. Patient Access Programs The Company offers discounts to patients under which the patient receives a discount on his or her prescription. In circumstances when a patient’s prescription is rejected by a third-party payer, the Company will pay for the full cost of the prescription. The Company reimburses pharmacies for this discount directly or through third-party vendors. The Company reduces gross sales by the amount of actual co-pay and other patient assistance in the period based on the invoices received. The Company also records an accrual to reduce gross sales for estimated co-pay and other patient assistance on units sold to distributors or pharmacies that have not yet been prescribed/dispensed to a patient. The Company calculates accrued co-pay and other patient assistance fee estimates using the expected value method. The estimate is based on contract prices, estimated percentages of medicine that will be prescribed to qualified patients, average assistance paid based on reporting from the third-party vendors and estimated levels of inventory in the distribution channel. Accrued co-pay and other patient assistance fees are included in “accrued expenses” on the condensed consolidated balance sheet. Patient assistance programs include both co-pay assistance and fully bought down prescriptions. Sales Returns Consistent with industry practice, the Company maintains a return policy that allows customers to return medicines within a specified period prior to and subsequent to the medicine expiration date. Generally, medicines may be returned for a period beginning six months prior to its expiration date and up to one year after its expiration date. The right of return expires on the earlier of one year after the medicine expiration date or the time that the medicine is dispensed to the patient. The majority of medicine returns result from medicine dating, which falls within the range set by the Company’s policy and are settled through the issuance of a credit to the customer. The Company calculates sales returns using the expected value method. The estimate of the provision for returns is based upon industry experience. This period is known to the Company based on the shelf life of medicines at the time of shipment. The Company records sales returns in “accrued expenses” and as a reduction of revenue. |
Cost of Goods Sold | Cost of Goods Sold Distribution Service Fees The Company includes distribution service fees paid for inventory management services as cost of goods sold. The Company calculates accrued distribution service fee estimates using the most likely amount method. The Company accrues estimated distribution fees based on contractually determined amounts. Accrued distribution service fees are included in “accrued expenses” on the condensed consolidated balance sheet. Shipping Fees The Company includes fees incurred by pharmacies for shipping medicines to patients as cost of goods sold. The Company calculates accrued shipping fee estimates using the expected value method. The Company records accrued shipping fees in “accrued expenses” on the condensed consolidated balance sheet. Non-Commercial Product The Company records the cost of non-commercial product distributed to patients as a cost of goods sold. Royalties on Product Sales The Company records royalty fees on the sale of commercial product as a cost of goods sold. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) (“ASU No. 2016-2”). Under ASU No. 2016-2, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. For leases with a term of twelve months or less, the lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities by class of underlying assets. ASU No. 2016-2 became effective for the Company beginning in the first quarter of 2019. The Company adopted this standard on January 1, 2019, using a modified retrospective approach at the adoption date through a cumulative-effect adjustment to retained earnings. The adoption did not have a material impact on its condensed consolidated statement of operations. The Company elected to not recognize lease assets and liabilities for leases with an initial term of twelve months or less. |
Net Income (Loss) per Common Share | Net Income (Loss) per Common Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and common stock equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. Potentially dilutive securities which include outstanding warrants, stock options and preferred stock have been excluded from the computation of diluted net loss per share as their effect would be anti-dilutive. For all periods presented, basic and diluted net loss were the same |
Nature of Operations, Basis o_3
Nature of Operations, Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Computation of Net Loss Per Share | The following table presents the computation of net loss per share (in thousands, except share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator Net loss $ (2,556 ) $ (7,779 ) $ (7,894 ) $ (13,788 ) Preferred stock dividends (389 ) (379 ) (1,128 ) (650 ) Net Loss allocable to common stock holders $ (2,945 ) $ (8,158 ) $ (9,022 ) $ (14,438 ) Denominator Weighted average common shares outstanding used to compute net loss per share, basic and diluted 10,869,530 11,241,684 10,830,816 10,864,036 Net loss per share of common stock, basic and diluted Net loss per share $ (0.27 ) $ (0.73 ) $ (0.83 ) $ (1.33 ) |
Schedule of Anti-dilutive Securities | Potentially dilutive securities not included in the calculation of diluted net loss per common share because to do so would be anti-dilutive are as follows: For the Three and Nine Months ended September 30, 2019 2018 Stock options outstanding 4,820,407 5,380,957 Warrants 35,667,329 35,646,829 Series C Preferred Stock 68,000 68,000 Series D Preferred Stock 3,000 3,000 Series E Preferred Stock 34,780,000 34,990,000 Series F Preferred Stock 3,810,000 3,080,000 Total 79,148,736 79,168,786 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory as of September 30, 2019 and December 31, 2018 are as follows: September 30, 2019 December 31, 2018 (in thousands) Work-in-Process $ 223 $ — Raw Materials 73 147 Finished Goods 177 95 Inventory, Net $ 473 $ 242 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets as of September 30, 2019 are as follows: Net Book Value Remaining Estimated Useful Life (Years) Annual Amortization Expense (in thousands) Intangible asset - Prestalia $ 276 4.25 $ 65 Intangible asset - DyrctAxess 63 11.84 5 Total $ 339 $ 70 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Warrant Activity | As of September 30, 2019 , there were 35,667,329 warrants outstanding, with a weighted average exercise price of $0.63 per share, and annual expirations as follows: Expiring in 2020 1,189,079 Expiring in 2021 343,750 Expiring in 2023 33,795,847 Expiring thereafter 338,653 Total 35,667,329 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following table summarizes stock option activity for the nine months ended September 30, 2019 . Options Outstanding Shares Weighted Average Exercise Price Outstanding, December 31, 2018 5,613,057 $ 0.83 Options granted 1,635,000 0.37 Options expired / forfeited (2,427,650 ) 0.64 Outstanding, September 30, 2019 4,820,407 0.71 Exercisable, September 30, 2019 2,986,333 $ 0.76 |
Summary of Additional Information on Stock Options Outstanding | The following table summarizes additional information on stock options outstanding at September 30, 2019 . Options Outstanding Options Exercisable Range of Exercise Prices Number Outstanding Weighted- Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.28 - $1.00 4,312,000 8.59 $ 0.57 2,762,000 $ 0.66 $1.50 - $1.80 493,207 7.93 $ 1.79 209,133 $ 1.79 $2.60 - $6.35 15,200 0.77 $ 4.48 15,200 $ 4.48 Totals 4,820,407 8.50 $ 0.71 2,986,333 $ 0.76 |
Nature of Operations, Basis o_4
Nature of Operations, Basis of Presentation and Significant Accounting Policies (Details Narrative) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Product Information [Line Items] | |||||
Cash | $ 2,692,000 | $ 2,692,000 | $ 3,918,000 | ||
Working deficit | 5,900,000 | 5,900,000 | |||
Net operating income (loss) | (2,600,000) | (7,900,000) | |||
Accumulated deficit | 34,867,000 | 34,867,000 | 25,848,000 | ||
Short term certificate of deposit | 50,000 | 50,000 | |||
Liabilities, fair value disclosure | 0 | 0 | 0 | ||
Assets, fair value disclosure | 0 | 0 | $ 0 | ||
Reduction in allowance | 55,000 | $ 0 | 14,000 | $ 0 | |
Goodwill and intangible asset impairment | 0 | 4,794,000 | 0 | 4,794,000 | |
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 | $ 0 | |
Number of operating segments | segment | 1 | ||||
Period eligible for refund prior to expiration date | 6 months | ||||
Period eligible for refund after expiration date | 1 year | ||||
Customer Concentration Risk | Customer 1 | Revenue Benchmark | |||||
Product Information [Line Items] | |||||
Customers concentration risk percentage | 22.00% | 42.00% | 30.00% | 42.00% | |
Customer Concentration Risk | Customer 2 | Revenue Benchmark | |||||
Product Information [Line Items] | |||||
Customers concentration risk percentage | 20.00% | 36.00% | 28.00% | 36.00% | |
Customer Concentration Risk | Customer 3 | Revenue Benchmark | |||||
Product Information [Line Items] | |||||
Customers concentration risk percentage | 13.00% | 12.00% | 18.00% | 12.00% |
Nature of Operations, Basis o_5
Nature of Operations, Basis of Presentation and Significant Accounting Policies - Schedule of Computation of Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||||||||
Net loss | $ (2,556) | $ (2,780) | $ (2,558) | $ (7,779) | $ (4,648) | $ (1,361) | $ (7,894) | $ (13,788) |
Preferred stock dividends | (389) | (379) | (1,128) | (650) | ||||
Net Loss allocable to common stock holders | $ (2,945) | $ (8,158) | $ (9,022) | $ (14,438) | ||||
Weighted average common shares outstanding used to compute net loss per share, basic and diluted (in dollars per share) | 10,869,530 | 11,241,684 | 10,830,816 | 10,864,036 | ||||
Net loss per share (in dollar per share) | $ (0.27) | $ (0.73) | $ (0.83) | $ (1.33) |
Nature of Operations, Basis o_6
Nature of Operations, Basis of Presentation and Significant Accounting Policies - Schedule of Anti-dilutive Securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 79,148,736 | 79,168,786 | 79,148,736 | 79,168,786 |
Series C Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 68,000 | 68,000 | 68,000 | 68,000 |
Series D Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 3,000 | 3,000 | 3,000 | 3,000 |
Series E Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 34,780,000 | 34,990,000 | 34,780,000 | 34,990,000 |
Series F Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 3,810,000 | 3,080,000 | 3,810,000 | 3,080,000 |
Stock options outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 4,820,407 | 5,380,957 | 4,820,407 | 5,380,957 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 35,667,329 | 35,646,829 | 35,667,329 | 35,646,829 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Work-in-Process | $ 223 | $ 0 |
Raw Materials | 73 | 147 |
Finished Goods | 177 | 95 |
Inventory, Net | $ 473 | $ 242 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 18 | $ 41 | $ 53 | $ 288 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Net Book Value | $ 339 |
Annual Amortization Expense | 70 |
Prestalia | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Net Book Value | $ 276 |
Remaining Estimated Useful Life (Years) | 4 years 3 months |
Annual Amortization Expense | $ 65 |
DyrctAxess | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Net Book Value | $ 63 |
Remaining Estimated Useful Life (Years) | 11 years 10 months 2 days |
Annual Amortization Expense | $ 5 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) $ in Thousands | Aug. 05, 2019 | Sep. 30, 2019 | Sep. 30, 2019 |
Short-term Debt [Line Items] | |||
Interest expense | $ 147 | $ 148 | |
Term Loan Subscription Agreements | Accredited Investors | |||
Short-term Debt [Line Items] | |||
Secured promissory notes prinicipal amount | $ 5,700 | ||
Debt issuance costs | $ 707 | ||
Debt accrued interest rate | 12.00% | ||
Extension period for term of loan | 60 days |
Licensing Agreements (Details)
Licensing Agreements (Details) - USD ($) | Mar. 16, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Licensing Agreement [Line Items] | |||||
Payments for royalties | $ 0 | $ 0 | |||
License Of DiLA Assets | Accrued Liabilities | |||||
Licensing Agreement [Line Items] | |||||
Upfront payment agreement for license agreement | $ 200,000 | ||||
Upfront payment contingency period | 90 days | ||||
Les Laboratories Servier | |||||
Licensing Agreement [Line Items] | |||||
Payments for royalties | $ 8,000 | $ 27,000 | |||
Biofarma | |||||
Licensing Agreement [Line Items] | |||||
Payments for royalties | $ 1,000 | $ 3,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Apr. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jul. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||||||
Labor cost percentage | 100.00% | ||||||
Third party markup percentage | 20.00% | ||||||
Due to related party | $ 4,000 | $ 4,000 | $ 4,000 | ||||
Proceeds from notes payable due to related party | 5,677,000 | $ 0 | |||||
Loss on settlement | 0 | $ 0 | 0 | 875,000 | |||
Related party expense | 32,000 | 496,000 | |||||
BioMauris, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Due to related party | $ 24,000 | ||||||
Pharma Hub Network | |||||||
Related Party Transaction [Line Items] | |||||||
Repayments of related party debt | 25,000 | 62,000 | |||||
Pharma Hub Network | Accounts payable and accrued liabilities | |||||||
Related Party Transaction [Line Items] | |||||||
Due to related party | $ 0 | $ 0 | |||||
Pharma Hub Network | Erik Emerson | |||||||
Related Party Transaction [Line Items] | |||||||
Equity method, ownership percentage | 22.00% | ||||||
Autotelic Inc | |||||||
Related Party Transaction [Line Items] | |||||||
Billed expenses | 778,000 | ||||||
Personnel Cost | $ 371,000 | ||||||
Warrant | |||||||
Related Party Transaction [Line Items] | |||||||
Warrant term | 5 years | ||||||
Exercise price per share (in dollars per share) | $ 0.55 | $ 0.55 | |||||
Fair value of warrant | $ 1,500,000 | ||||||
Loss on settlement | $ 750,000 | ||||||
Master services agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Compensation description | After the Equity Financing Date, the Company paid Autotelic Inc. a cash amount equal to the actual labor cost plus 100% mark up of provided services and 20% mark up of provided services by third party contractors or material used in connection with the performance of the contracts, including but not limited to clinical trial, non-clinical trial, Contract Manufacturing Organizations, FDA regulatory process, Contract Research Organizations and Chemistry and Manufacturing Controls. | ||||||
Master services agreement | Minimum | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from common or preferred stock | $ 10,000,000 | ||||||
Master services agreement | Related party | |||||||
Related Party Transaction [Line Items] | |||||||
Service provider percentage | 20.00% | ||||||
Master services agreement | Warrant | |||||||
Related Party Transaction [Line Items] | |||||||
Service provider percentage | 100.00% | ||||||
Settlement agreement with autotelic inc | Maximum | |||||||
Related Party Transaction [Line Items] | |||||||
Warrants to purchase shares of common stock | 1,345,040 | ||||||
Settlement agreement with autotelic inc | Series E Preferred Stock | |||||||
Related Party Transaction [Line Items] | |||||||
Number of stock issued during the period, shares | 162.59 | ||||||
Proceeds from notes payable due to related party | $ 813,000 | ||||||
Accrued and unpaid fees | $ 740,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Nov. 09, 2018 | Apr. 30, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | May 31, 2018 | Sep. 30, 2019 | Sep. 30, 2019 | Oct. 31, 2019 | Aug. 20, 2019 | May 28, 2019 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Conversion of Series E Preferred stock for common stock, shares | 2 | |||||||||
Warrants outstanding | 35,667,329 | 35,667,329 | ||||||||
Warrants | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Weighted average exercise price | $ 0.63 | |||||||||
Warrant | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Exercise price per share (in dollars per share) | $ 0.55 | $ 0.55 | ||||||||
Warrants outstanding | 35,667,329 | 35,667,329 | ||||||||
Adjustable warrants, shares | 34,737,030 | 34,737,030 | ||||||||
Number of warrants expired, shares | 600,000 | 600,000 | ||||||||
Series E convertible preferred stock | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Shares issued upon conversion | 53,923 | |||||||||
Unregistered shares issued during period | 107,846 | |||||||||
Common stock, conversion price | 53,923 | |||||||||
Accrued dividends | $ 2,000,000 | |||||||||
Series F Convertible preferred stock | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Accrued dividends | $ 177,000 | |||||||||
Subscription Agreements [Member] | Warrant | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Warrants to purchase shares of common stock | 0.75 | 0.75 | 0.75 | |||||||
Exercise price per share (in dollars per share) | $ 0.55 | $ 0.50 | $ 0.55 | |||||||
Term of warrant | 5 years | 5 years | 5 years | |||||||
Subscription Agreements [Member] | Warrant | Private Placement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Warrants to purchase shares of common stock | 73,000 | 308,000 | 2,958,460 | |||||||
Subscription Agreements [Member] | Series E convertible preferred stock | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Sale of stock, shares | 2,812 | |||||||||
Preferred stock stated dividend rate | 8.00% | |||||||||
Proceeds from private placement | $ 12,200,000 | |||||||||
Placement agent fees and estimated expenses | 2,000,000 | |||||||||
Subscription Agreements [Member] | Series E convertible preferred stock | Warrant | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Purchase price of preferred stock | $ 5,000 | |||||||||
Common stock at a conversion price, per share | $ 0.5 | |||||||||
Subscription Agreements [Member] | Series F Convertible preferred stock | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Sale of stock, shares | 73 | 308 | ||||||||
Purchase price of preferred stock | $ 5,000 | $ 5,000 | ||||||||
Common stock at a conversion price, per share | $ 0.5 | $ 0.5 | ||||||||
Preferred stock stated dividend rate | 8.00% | |||||||||
Term of warrant | 5 years | |||||||||
Proceeds from private placement | $ 300,000 | $ 1,400,000 | ||||||||
Placement agent fees and estimated expenses | $ 180,000 | |||||||||
Weighted average exercise price | $ 0.55 | $ 0.55 | ||||||||
Tender Offer [Member] | Series E convertible preferred stock | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Exercise price per share (in dollars per share) | $ 0.50 | $ 0.5 | ||||||||
Tender Offer [Member] | Series F Convertible preferred stock | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Exercise price per share (in dollars per share) | $ 0.55 | |||||||||
Number of common stock called by each warrant, shares | 2 | |||||||||
Forecast | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Shares issued upon conversion | 20,000 | |||||||||
Common stock, conversion price | 20,000 |
Stockholders' Equity Warrants O
Stockholders' Equity Warrants Outstanding (Details) | Sep. 30, 2019shares |
Equity [Abstract] | |
Expiring in 2020 | 1,189,079 |
Expiring in 2021 | 343,750 |
Expiring in 2023 | 33,795,847 |
Expiring thereafter | 338,653 |
Total | 35,667,329 |
Stock Incentive Plans (Details
Stock Incentive Plans (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted, Shares | 1,635,000 | |||
Share-based payment arrangement, option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options Outstanding Weighted-average Remaining Contractual Life (years) | 8 years 1 month 2 days | |||
Options granted, Shares | 1,635,000 | |||
Share-based payment arrangement, expense | $ 72 | $ 814 | $ 1,300 | $ 708 |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | 831,000 | 831,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 0 | $ 0 |
Stock Incentive Plans - Schedul
Stock Incentive Plans - Schedule of Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Options Outstanding Beginning, Shares | shares | 5,613,057 |
Options granted | shares | 1,635,000 |
Options expired / forfeited | shares | (2,427,650) |
Options Outstanding Ending, Shares | shares | 4,820,407 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Options outstanding, weighted average exercise price, beginning of period ( in dollars per share) | $ / shares | $ 0.83 |
Options granted, weighted average exercise price (in dollars per share) | $ / shares | 0.37 |
Options expired/forfeited, weighted average exercise price (in dollars per share) | $ / shares | 0.64 |
Options outstanding, weighted average exercise price, end of period ( in dollars per share) | $ / shares | $ 0.71 |
Options Outstanding Exercisable, Shares | shares | 2,986,333 |
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares | $ 0.76 |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Additional Information on Stock Options Outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Number Outstanding | 4,820,407 | 4,820,407 | ||
Weighted- Average Remaining Contractual Life (Years) | 8 years 6 months | |||
Weighted average exercise price (in dollars per share) | $ 0.71 | $ 0.71 | ||
Number Exercisable | 2,986,333 | 2,986,333 | ||
Weighted average exercise price (in dollars per share) | $ 0.76 | $ 0.76 | ||
$0.28 - $1.00 (in dollars per share) | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Number Outstanding | 4,312,000 | 4,312,000 | ||
Weighted- Average Remaining Contractual Life (Years) | 8 years 7 months 2 days | |||
Weighted average exercise price (in dollars per share) | $ 0.57 | $ 0.57 | ||
Number Exercisable | 2,762,000 | 2,762,000 | ||
Weighted average exercise price (in dollars per share) | $ 0.66 | $ 0.66 | ||
Range of exercise prices, lower (in dollar per share) | 0.28 | |||
Range of exercise prices, upper (in dollar per share) | $ 1 | |||
$1.50 - $1.80 (in dollars per share) | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Number Outstanding | 493,207 | 493,207 | ||
Weighted- Average Remaining Contractual Life (Years) | 7 years 11 months 5 days | |||
Weighted average exercise price (in dollars per share) | $ 1.79 | $ 1.79 | ||
Number Exercisable | 209,133 | 209,133 | ||
Weighted average exercise price (in dollars per share) | $ 1.79 | $ 1.79 | ||
Range of exercise prices, lower (in dollar per share) | 1.50 | |||
Range of exercise prices, upper (in dollar per share) | $ 1.80 | |||
$2.60 - $10.70 (in dollars per share) | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Number Outstanding | 15,200 | 15,200 | ||
Weighted- Average Remaining Contractual Life (Years) | 9 months 7 days | |||
Weighted average exercise price (in dollars per share) | $ 4.48 | $ 4.48 | ||
Number Exercisable | 15,200 | 15,200 | ||
Weighted average exercise price (in dollars per share) | $ 4.48 | $ 4.48 | ||
Range of exercise prices, lower (in dollar per share) | 2.60 | |||
Range of exercise prices, upper (in dollar per share) | $ 10.70 | |||
Share-based payment arrangement, option | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Share-based payment arrangement, expense | $ 72 | $ 814 | $ 1,300 | $ 708 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 9 Months Ended | ||
Sep. 30, 2019USD ($)patent | Jan. 02, 2019USD ($) | Jan. 01, 2019USD ($) | |
Other Commitments [Line Items] | |||
Number of patents | patent | 2 | ||
Operating lease term of contract | 37 months | ||
Operating lease rent expenses | $ 6,458 | ||
Operating lease, expected increased rent expense for final term of agreement | 7,057 | ||
Operating lease, right-of-use asset | 157,000 | ||
Operating lease liabilities | 165,000 | ||
Operating lease liability, current | 77,000 | ||
Operating lease liability, net of current portion | $ 88,000 | ||
Accounting Standards Update 2016-02 [Member] | |||
Other Commitments [Line Items] | |||
Operating lease, right-of-use asset | $ 200,000 | ||
Operating lease liabilities | $ 200,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Nov. 19, 2019 | Nov. 01, 2019 | Oct. 30, 2019 | Sep. 30, 2019 |
Warrant | ||||
Subsequent Event [Line Items] | ||||
Exercise price per share (in dollars per share) | $ 0.55 | |||
Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Warrants and rights outstanding | $ 150,000 | |||
Payments for repurchase of common stock | 100,000 | |||
Payments for repurchase of convertible preferred stock | $ 100,000 | |||
New Stock issued during period (in shares | 350,000 | |||
Exercise price per share (in dollars per share) | $ 0.09 | |||
License agreement, minimal sales threshold set forth In agreement | $ 1,000,000 | |||
Subsequent event | Series F Preferred Stock | ||||
Subsequent Event [Line Items] | ||||
Stock repurchased during period (in shares) | 20 |